Real king in mobile content market is willingness of customer to pay, say OTT players, telcos

NEW DELHI: The real king in the mobile content market is the willingness of the customer to pay, the telecom and over the top (OTT) industry leaders said at the ET Telecom Indian Mobile Congress on Friday.

The high powered panel which discussed how content will drive the growth for telecom companies and over the top content players and the challenges the industry faces included Reena Rathi, Head VAS & Content, Aircel, Salil Kapoor, MD, HOOQ India, Albert Almeida, COO, Hungama and Nikhil Pahwa of SavetheInternet.in

All panelists were of the view that it was about time for the industry to move from the try model of content consumption to the buy model.

“It’s imperative for telecom companies to have a fresh revenue stream as the revenue for voice is falling. Content could be one such stream as out of total internet usage 72% comes from video. We do make money through data usage. However, it’s equally important to monetise content. There’s a need for a robust revenue model there,” Aircel’s Rathi said.

The panelists also said that both telecom players and OTT companies need to form a strong partnerships to drive revenue growth.

“For the OTT players, we shouldn’t merely play the role of a pipe but we should have our own content as well along with partnerships. Across the world partnerships have been very successful. Netflix is doing that across the world,” she said.

The panelists said greenshoots for monetisation of mobile content industry were already visible as consumers were opening to the idea of paying. However, the possibility of content being a high margin business was still far off.

“Consumers will pay if the pricing is correct and the content is different and appealing, At Hungama, we are already seeing that. So, we need the right price points and content,” Almeida of Hungama said.

Panelists said high content acquisition cost was also a big deterrent for industry and to be financially viable it’s necessary on high quality but low cost content.

“The problem currently is that the cost of acquisition of content is rising but the customer is not willing to pay as much,” Salil Kapoor, MD, HOOQ India said.

“Why would people invest when there’s no revenue. We shouldn’t be offering anything for free and all stakeholders including telcos should understand that,” Kapoor added.

Nikhil Pawha of SavetheInternet.in said that for the content ecosystem to be financially viable content providers should be the best and telecom companies should be the best pipe. “You still have connectivity issue to be resolved. Content shouldn’t be the hook to acquire customers for telecom operators. Instead, services should be,” said Pahwa.

The panelists also focused on the need of developing high quality regional content as it’s going to drive the growth and revenues in future.

“I was at a conference recently and I wanted to acquire a regional game. There was hardly any developers for regional content. Why would a developer create it when the value is creating an app for the international market which gives more monetary value on appstore,” said Rathi.

"In reality, the king will be customers willingness to pay," she said.

“India is a country of localisation. High quality regional content will force people to pay,” Almeida said. Kapoor and Pahwa also echoed the same views.

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